Curly question for accountants (AU/NZ) - overseas property vs overseas home office

[MAXNZ]

Here's a curvy one for the accountants:

1. Can one claim Home Office expenses in NZ for a property based overseas?
2. Can one claim overseas Home Office expenses (home office based overseas) in NZ (as if owner/company is NZ tax resident) for a property based in NZ?

[Beano]

Here's a curvy one for the accountants:

1. Can one claim Home Office expenses in NZ for a property based overseas?
2. Can one claim overseas Home Office expenses (home office based overseas) in NZ (as if owner/company is NZ tax resident) for a property based in NZ?

So income is in NZ and the companies office is based in australia ?
Or income is in australia and office in NZ ?

[MAXNZ]

So income is in NZ and the companies office is based in australia ?
Or income is in australia and office in NZ ?

Yes, it's a bit wonky, but here how I understand it

1. IPs in AU (taxed in AU), claim NZ based HO expenses (relating to income produced in AU) against NZ declared income.

2. IPs in NZ (taxed in NZ), claim AU based HO expenses (relating to income produced in NZ) against NZ declared income.

[Rosco]

You have asked this in the Facebook group and answers on there.

For others, just make sure Home office claims are realistic.

If live in NZ, and have rental in Aussi. Yes can claim fair Home Office costs in NZ, as the Australian rental income will be taxed in NZ too (unless you have 4 year exemption for just moving here, in which case wouldn't return and couldn't claim).

If live overseas and have rental in NZ. Yes can claim fair Home Office costs against NZ income, in NZ.

Example 1) Home 100 sqm. Office 10 sqm. Use the office say once a week for rental business, for 1 hour, to do book work etc for one rental with property manager. Meanwhile kids use office every day to play computer gains. Can't claim 10% of home expenses as Home office costs! Would need to apportion based on use. So might be 80% kids and 20% rental. So 10% goes down to 2%.

Example 2 ) Home 200 sqm and office 20 sqm. Home office is used half the time for rentals and half for your PAYE job. Could only claim half for rentals, so 5%

Example 3) Office has a bed in it. This would greatly reduce the space used, so % would be lower. Same if other items stored or Room used for something else as well as office

For each example you could technically claim some shared ares for toilet, hallways etc, but if Home office use is so small, need to be realistic and in most cases home office for small rental owners is tiny.

Ross

[MAXNZ]

Thanks Ross,

yes I did ask on FB as well